Credit where it’s due: Co-operative Bank freezes Christmas overdrafts

ClearDebt’s reaction to the news that Co-op bank are suspending arranged overdraft interest charges for three months

We often give creditors a hard time for some of the things they do to customers. Rightly so in our view; so it’s only fair that, when we see a bank bending over backwards to help over-indebted customers, that we should be fulsome in our praise. So, take a bow Co-op:

Co-operative Bank current account customers will have interest on agreed overdrafts frozen for three months in order to provide a helping hand to those struggling with post-Christmas debts.

The Co-op, which has 1.5 million current account customers, says someone using a £2,000 agreed overdraft would save £75 in fees in the three-month offer period, while a customer with a debt of £500 could save more than £18.

UK Debt illustated by Co-operative Banking Group
Click to enlarge © Copyright Co-operative Banking Group

Of course Co-op aren’t being entirely altruistic. We are sure they see good marketing sense in this. They are a mutual, after all (owned by their customers) and this initiative will certainly help people believe that they care for the people who have accounts with them. But, this tiny pinch of salt apart, this has to be a helpful thing to do.

It’s important to note this applies to arranged overdrafts only – take an un-arranged overdraft from Co-op and you’ll still be in the doo-doo.

We often recommend Co-op to our customers if they need to change bank accounts (too late to do this? – you could look at our pre-paid card, ClearCash: commercial over!). And we also applaud them because (along with Barclays) they are the only bank to offer a basic current account to undischarged bankrupts.

We wonder if other banks will join Co-op in taking the post-Christmas pressure off?

We asked their trade association British Bankers’ Association via Twitter:

Well, we are going to ask the other banks through their social networking identities and we’ll report any response we get here.

Meanwhile, credit where credit is due. Here is all the coverage we could find of Co-op’s initiative:

We are going to email all our customers who we know have Co-op accounts to draw attention to this good news.

Happy New Year everyone.

Oh, and, if you want to know more about creditors activities we’ve discovered in the past, then take a look at these links:

Tell others:



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  1. It’s certainly a commendable measure and welcome one by many – although it never fails to pay to scrutinise the small print. If only it were like mortgage interest rate reductions between lenders that used to get wide publicity on the news: when one drops rates all followed suite very soon.

  2. It’s
    good to see that Co-op are living up to their reputation as an ethical bank,
    instead of penalising loyal customers for circumstances that may be out of
    their control – they have shown great empathy and consideration (words rarely
    used in the banking world).  

    they have done has shown that along with the fact that they refuse to invest in
    companies linked with the arms trade, global climate change and
    animal testing, they are ethical on a personal level – in the day to day
    finances of their customers. This makes their online account name “Smile” quiet
    appropriate for all that have benefit from this policy on charges.

  3. Just to give an idea on what other banks are doing at the moment, I
    noticed an advert in today’s (5th January 2012) Metro newspaper for
    Natwest with the headline “Natwest introduces A THANK YOU”. It’s the
    launch of a scheme to offer free cinema tickets and exclusive film
    screenings to Natwest current account customers. I’m sure lots of people
    will be happy with this offer, but I don’t think it can compare to what
    Co-op are doing to help their customers in these tough times.

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